Workers see few benefit cuts, despite rising costs

U.S. workers are fiercely loyal to their workplace benefits, often citing them as on par with their salary and a key piece of why they work where they do — but a new survey finds that employers’ interest in offering voluntary benefits may be waning, at least temporarily.

Just 50% of employers agreed that “voluntary benefits are a significant part of our company’s benefits strategy,” down from 58% in 2012 and the first dip in that data point after three years of moving higher (though still higher than the 2011 figure), according to the 2013 results of an annual survey of employers and workers conducted by GfK Custom Research for MetLife, an insurance company that also provides employee benefit programs.

And just 35% of companies said they plan to increase the number of voluntary benefits they offer employees in the next two years, down from 47% in 2012, according to the survey of 1,510 employers and 1,203 full-time workers at companies with two or more employees.

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Half of employees said they are “very satisfied” with their workplace benefits.

“This shift in employer focus is somewhat unexpected. But, rather than a change in strategy, this is likely a result of employers being consumed by health-care reform and cost-control challenges,” Todd Katz, executive vice president of group, voluntary and worksite benefits at MetLife, said in a news release.

Voluntary benefits are those, such as life insurance and vision plans, that workers can choose to buy. Workers enjoy a group rate on products that might otherwise be more expensive on the individual market. Such programs can help employers attract and retain workers at a lower cost than employer-paid benefits.

In another sign of divergence between workers and employers, the portion of companies who said their workers are very satisfied with their benefits actually dropped, even as the portion of employees who said they’re satisfied hit a high-water mark.

Fully 50% of employees said they are “very satisfied” with their workplace benefits, up from 38% a year earlier, according to the MetLife survey — that’s an all-time high in the survey’s 11-year history. MetLife published the survey results on Monday. Read the full study here.

For employers, cost is the top factor cited in their decision-making about benefits, with 74% of employers pointing to it. The good news for workers is, despite the overall emphasis on costs, 28% of employers said they plan to increase their budget for employer-paid benefits, and 54% of employers said they’ll maintain the same budget, according to the MetLife survey.

On the bad-news side: 13% of companies plan to cut their benefit budget. Another 6% are not sure what they’re going to do.

Workers love their benefits — and want more

Fully 50% of workers “strongly agree” that benefits are an important reason they don’t leave their employer, up from 38% a year earlier, according to the MetLife survey. And 43% strongly agreed that benefits were one of the key reasons they came to work for their employer, up from 28% a year earlier.

“Employees who are very satisfied with their benefits are more than twice as likely to report being very satisfied with their jobs,” MetLife’s Katz said.

The survey’s findings mirror an earlier study by Mercer, the human-resources and financial-services consulting firm, of 1,506 U.S. retirement-plan participants.

In that survey in 2013, 93% of workers “somewhat or strongly” agreed with the statement that “my health benefits are as important as my salary” and 76% agreed that “my benefits are a reason I work here.”

But that study found that out-of-pocket health costs are starting to take a toll. Some 22% of workers said, given those costs, their health benefits are “probably not worth it” or “definitely not worth it.”

Just 32% of workers said health benefits are “definitely worth it,” while 47% said they’re “probably worth it,” according to the Mercer survey.

Similarly, the MetLife study found that 48% of workers are “very concerned” about having enough money to pay for the health expenses their insurance doesn’t cover — that’s up from 40% in 2012.

Another sign of the economic difficulties faced by workers: 44% said they’re very concerned about paying their monthly bills, up from 38% in 2012, and 42% are very concerned about job security, up from 31% in 2012, according to MetLife.

Also, 40% of workers strongly agreed that they’d like help from their employer “in achieving financial security through employee benefits.” That’s up from 29% in 2012.

Plus, 49% are “very concerned” about having access to affordable health insurance, up from 40% in 2012, and 40%, up from 29%, are “very concerned” their employer will take away benefits.

Health benefits remain the top-valued benefit among workers: Fully 88% of employees said that employer-provided health insurance is “extremely important” or “very important,” far and away the most popular benefit, according to a survey conducted by Greenwald & Associates, a research firm, and the Employee Benefit Research Institute, a nonprofit research group.

Seventy-six percent of employers offer health insurance, according to that survey in June 2013 of 1,014 workers aged 21 to 64.

The EBRI survey also found that 78% of employees said the benefits package offered by an employer is “extremely” or “very” important in their decision of whether to accept a job offer.

But workers aren’t altogether thrilled with their current benefits, according to EBRI: 43% said they’re “extremely” or “very” satisfied, but another 31% are “somewhat” satisfied and 26% are “not too” or “not at all” satisfied. Read the EBRI study here.

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